Foreign businesses in China forced to unionize

By
Sara Flounders

Published Oct 18, 2008 6:54 AM

China is forcing some of the biggest corporations in the world to immediately
allow workers in their giant plants, offices and shops to unionize. In a widely
publicized 100-day campaign, the Chinese government set a deadline of Sept. 30
for corporations doing business there to recognize unions.

The ruling benefits millions of Chinese workers, who will now have a say not
only in their wages but in working conditions and health and safety issues.

This sweeping change impacts almost all the U.S. Fortune 500 companies doing
business in China. Wang Ying, a senior official with the state-backed All-China
Federation of Trade Unions, explained that there are holdouts, such as
Microsoft and pharmaceutical giant Wyeth. But even they “don’t dare
say they will not set up unions. They are finding all kinds of excuses to put
it off.” (Christian Science Monitor, Sept. 29)

The ACFTU is under the leadership of the Chinese Communist Party. Two years ago
it represented 170 million workers. Its goal by the end of the 100-day campaign
was to increase its membership to 200 million—more than 12 times the
number of unionized workers in the United States.

Will these unions be just paper organizations? The giant transnational
corporations don’t think so, judging by their hostility.

Jim Leininger, the Beijing head of the U.S. management consulting firm Watson
Wyatt, explained that “Many foreign firms see unions as an unnecessary
hindrance.” But they have acceded to the unions, he said, because
“they don’t really have a choice.” (CSM, Sept. 29)

These are companies that moved to China to lower manufacturing costs and avoid
unions in their home countries. Now they “fear admitting the unions will
give their Chinese employees the power to slow or disrupt their operations and
will significantly increase the cost of doing business here.” (New York
Times, Sept. 12) In other words, they will have to pay more in wages and
benefits. The new laws will also make it more difficult to fire workers.

Wal-Mart, McDonalds, Disney

Wal-Mart, McDonalds and Yum Brands—which operates KFC and Pizza
Hut—have all been forced to agree to unions. Yum Brands has 160,000
workers in China. Wal-Mart has 83,000 workers at its 108 Chinese stores in 55
cities. Wal-Mart, Disney and Adidas have been singled out for using contractors
that violate Chinese labor law.

A contract with Wal-Mart signed in late July brought an immediate 8 percent pay
increase, along with job protection and legal support in addressing
workers’ grievances over intimidation, forced overtime, fraudulent pay
stubs and dangerous work conditions. Workers at Wal-Mart stores in the U.S. and
other countries where unions have been kept out face similar conditions.

ACFTU representative Wang Ying says more than 4,100 major foreign companies run
by the Fortune 500 are doing business in China. She says that despite
“tremendous resistance,” especially from U.S. companies, 82 percent
of the companies have formed trade unions to date, and the figure would reach
90 percent by the end of this year. As of July before the campaign was started,
workers had been able to form unions in less than 50 percent of the Fortune 500
firms. (China Daily, Oct. 7)

While global companies were the target of the 100-day campaign, Chinese
companies and contractors make up the bulk of manufacturing work, and those not
already unionized are facing pressure to do so.

The 100-day union drive follows strong legislation on labor contracts and
arbitration passed by China’s parliament, the National People’s
Congress, to strengthen employee rights “after decades of laissez faire
investor-friendly policies.” Chinese labor laws now guarantee the right
to strike and the right to sue the employer directly. Chinese workers are
increasingly turning to courts to enforce their rights to organize. (China Law
Blog, Sept. 15)

Wildcat strikes led the way

The wave of unionization follows several years of growing wildcat strikes, tens
of thousands of job actions, and efforts of Chinese workers to organize to
defend their rights against super-exploitive conditions in foreign-owned
plants. From 1995 to 2006 labor disputes increased 13-fold, according to China
Law Blog. Many disputes erupted into mass demonstrations.

The role of unions is also changing. In Guangdong Province in the south, long
the center of the largest number of foreign-owned plants, unions are becoming
more aggressive in their demands. New labor laws and stricter labor law
enforcement means that corporations can no longer avoid paying overtime.

ACFTU also has an active campaign to reach out to millions of new migrant
workers who continue to flood in from the countryside. These are the workers
with the lowest skills who hold the most oppressive jobs.

These campaigns are not socialist measures. Rather they are defensive efforts,
spurred by mass struggle, to protect the workers from the worst effects of
capitalist ownership, which has grown in China ever since the adoption of
“market socialism” in the late 1970s.

‘Market socialism’—a concession

The Chinese Communist Party in the early years of the socialist revolution led
heroic efforts to conquer extreme underdevelopment through such campaigns as
the Great Leap Forward and the effort to move from collective farms to communes
and rural industries.

These heroic efforts enabled the Chinese Revolution to mobilize a largely
peasant population to lay the groundwork for a more modern society. Giant
strides were made in literacy for the whole population. Mass immunization
campaigns and basic health brigades brought epidemics and plagues under
control. Infant mortality and life expectancy improved dramatically. Major
construction projects undertaken by millions of volunteers brought irrigation,
dams and modern roads to the countryside for the first time.

Meanwhile, the developed imperialist world kept China blockaded, sanctioned and
isolated from the modern technologies that were changing the West.

In the late 1970s the grouping in the Chinese leadership often called
“capitalist roaders” made dangerous concessions in an effort to
overcome underdevelopment and attract modern technology and investment capital.
China opened its doors to imperialist corporations. The communes were broken up
and land use was virtually privatized.

Initially, special capitalist enterprise zones were established. Thousands of
Western corporations flocked to take advantage of the low wages that millions
of peasants arriving from rural areas were willing to accept.

From the 1990s on, the socialist economy made further concessions. Today more
than 150,000 foreign-owned enterprises operate in China. They parcel work among
hundreds of thousands of subcontractors.

The All-China Federation of Industry and Commerce reported last February that
nearly 200 million Chinese, out of a 1.3 billion total population, worked in
private enterprises. However, these enterprises produced 60 percent of the
country’s gross domestic product.

The government’s policy also encouraged the growth of a capitalist class
within China. In perhaps the most dangerous concession, the Chinese Communist
Party has agreed to allow members of that class into the workers’ own
party.

Imperialism remains hostile

U.S. imperialism for decades has aimed to penetrate China’s economy and
political structure enough to carry out a complete capitalist
counter-revolution.

Even while U.S. corporations flooded into China, the Pentagon continued its
plans to surround China with bases. It arms and continues to support a
separate, hostile government in Taiwan, an island that is internationally
recognized as part of China.

The U.S. also supports and gives endless publicity to the Tibetan separatist
movement and finances the phony government-in-exile headed by the Dalai
Lama.

China’s economy has continued to grow. It now holds a huge trade surplus
with the U.S. But the money that China holds means that a significant part of
the economy is hostage to the constantly devaluing U.S. dollar. Nevertheless,
China has been able to invest billions in infrastructure projects and finance
its development.

The capitalist market has made serious inroads in production, distribution and
finance. International banks were just recently granted the legal right to buy
major stakes in Chinese banks. A great deal of China’s growth is linked
to export-oriented manufacturing industries.

The impact of the worldwide capitalist crisis on foreign corporations doing
business in China is not yet known. The interests of several million small
entrepreneurs, merchants and traders, along with a growing number of big
Chinese capitalists, are bound up with imperialism.

But China’s revolutionary break with imperialism in 1949 still remains a
mighty social force. It inspires millions of Chinese workers to this day. The
recent laws and organizing campaigns are giving the workers new strength when
and where they most need it. By all accounts, in both the Chinese media and the
Western corporate media, they are taking advantage of the moment.

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